In 1872, two locomotives were ordered by the Otago provincial government to operate trains on the newly built Dunedin and Port Chalmers Railway.

It was the first line to be built to the new national gauge standard of 3 ft 6 in (1,067 mm), and had Robert F. Fairlie as its consulting engineer.

[1] In 1875, needing additional motive power for the lightly-laid lines of the period, the national Government placed an order with Avonside for six Double Fairlie locomotives that became the E class.

Both locomotives continued in service until the railway was amalgamated into the Government system, becoming class "E" and gaining Otago section numbers.

They gave good reliable service, but the complexity resulting from the fact that they had double the moving parts of a normal locomotive led to maintenance difficulties.

"Josephine", once withdrawn from Public Works Department service in 1917, was sold for scrap to the Otago Iron Rolling Mills.

She was still there in 1926 when the company had her cosmetically restored (including the fitting of balloon funnels, which she never had in service) and she was placed on display at the New Zealand South Seas Exhibition of 1926 next to AB class 608 "Passchendaele".

Although none of the other locomotives survived, one of the powered bogies from an Avonside E Class exists cylinder-less at Ferrymead Heritage Park, Christchurch.

As "Josephine" never ventured to the North Island in NZR service, the E classification would not have been an issue despite there being two distinct types of locomotive.